Can the Rise of Social Housing Cool Down Soaring Property Prices?

Thousands of Social Housing Units Hit the Market

The Hanoi People’s Committee has approved the joint venture investment for the Tien Duong 1 social housing project in Phuc Thinh commune, with a construction scale of 3,530 apartments. Previously, Hanoi conducted a public tender to select the investor for the Tien Duong 1 social housing project. The winning bidder was the consortium of Viglacera Corporation, Hoang Thanh Infrastructure Investment and Development Joint Stock Company, and Central Construction Joint Stock Company, who will serve as the project’s investor.

According to the approved investment policy, the Tien Duong 1 social housing project will be built on approximately 44.6 hectares of land, with a population capacity of around 12,465 residents. The project will provide approximately 3,530 apartments, including 3,103 social housing units, 427 commercial apartments, and 99 low-rise terraced houses. The total investment capital for the project is estimated at 8.69 trillion VND, excluding compensation, support, and resettlement costs. The project is scheduled to be implemented from 2024 to 2030, with a 50-year operational period starting from the date the investor receives the land allocation, lease, and land-use conversion decision.

Previously, several other social housing projects in Hanoi had also received investment approval and commenced construction. However, the social housing segment, which was expected to alleviate some of the housing pressure, is currently facing delays in progress.

Regarding the 1 million social housing unit initiative, the Ministry of Construction reports that, to date, there are 692 social housing projects nationwide under implementation, with a total scale of over 633,000 units. Collectively, the number of completed, started, and approved projects has reached nearly 60% of the initiative’s target.

In the first nine months of the year, nearly 43,700 units were completed nationwide, achieving nearly 44% of the annual plan. It is projected that by the end of the year, 83% of the plan will be fulfilled.

Concerningly, in major cities like Hanoi and Ho Chi Minh City, where the demand for social housing is high, the completion rate remains below 50%.

According to reports, in the first nine months of the year, Hanoi achieved 44% of its target (with a 2025 target of 4,670 units, 2,060 units have been completed). The projected completion rate for this year is 68%. Ho Chi Minh City has achieved approximately 33% (with a 2025 target of 13,040 units, 4,277 units have been completed). The projected completion rate for this year is 53%…

Additionally, many localities have low completion rates for social housing construction this year, such as Lang Son (27%), Thanh Hoa (34%), Quang Tri (32%), and Lam Dong (20%). Some localities, including Cao Bang, Son La, Dien Bien, and Lai Chau, have yet to commence any projects or begin construction.

What Are the Causes?

The Ministry of Construction identifies several challenges and limitations in social housing development, stemming from various causes.

First, some localities have not given sufficient attention to social housing development; they have not included social housing targets in their annual and five-year socio-economic development plans, nor established Steering Committees for social housing development.

Second, the number of completed projects has not met targets. Some social housing projects have been started but have not commenced construction or are progressing slowly.

Third, while localities have allocated large land areas for social housing, the “quality” of this land remains inadequate. Many social housing plots are poorly located, far from city centers, and lack connectivity in technical and social infrastructure, making them unsuitable for immediate use. Slow land clearance processes have also delayed land handover to investors, affecting project timelines.

Fourth, many localities have not allocated local budgets for compensation, support, resettlement, and technical infrastructure investment to ensure clean land funds.

Finally, some selected investors for social housing projects lack sufficient financial capacity and experience, leading to project delays.

Regarding solutions, the Ministry of Construction will lead and coordinate with the Ministry of Finance to research and submit to the Prime Minister, by September, the Decree on the National Housing Fund and the Decree amending Decree No. 100 on the development and management of social housing. The Ministry will also urge localities and businesses to implement social housing construction, ensuring the targets set by the Prime Minister are met.

The Ministry also requires localities to focus on directing and urging investors to implement social housing projects, striving to complete and exceed the targets assigned in the decision to adjust the completion targets for social housing in 2025 and subsequent years until 2030…